Special Report: Transit

Merulla to Introduce Motion to End Area Rating for Transit

Councillor Sam Merulla is challenging his Council colleagues to address a long-standing failure of amalgamation by ending area rating for transit.

By Ryan McGreal
Published January 28, 2015

Ward 4 Councillor Sam Merulla has circulated a notice of motion to ask staff to report back on "the feasibility and impacts" of ending area rating for transit.

When the municipal governments of Hamilton-Wentworth were amalgamated in 2001, one of the compromises was that the various former municipalities would receive differential tax rates for certain services: transit, recreation and fire services.

The compromise has always been controversial. Hamilton is the only municipality in Ontario to area-rate services and tax rates.

In the case of transit, it severely limits the city's ability to expand service into new areas, since it requires that the entire cost of that service expansion is borne by the local ratepayers instead of by the city in general.

In late 2009, Council approved a motion by Mayor Fred Eisenberger to establish a citizens' jury of randomly-selected residents from each ward, study the issue and recommend a solution.

Council ended up punting a decision until after the 2010 election, but they did approve a solution to area rating in early 2011 for recreation and fire services - but not for transit.

This has had a number of perverse consequences for transit service in Hamilton, some of which are documented in this CATCH article. In addition, it has distorted the politics of transit, as argued in this article by James Arlen.

A recent failure of area rating was the decision to end transcab service to Binbrook, since the entire cost had to be borne by Binbrook residents.

With area rating, it becomes near-impossible to expand transit service to areas that are underserved because the cost of expansion is not carried by the city as a whole.

It also leads to chronic disconnects between the burgeoning need for higher transit service levels and the political interests of suburban councillors, who have less transit service in their wards and tend to vote against transit improvements anywhere.

At the recent Council meeting when a slim majority of 9-7 Councillors voted to kill the transit-only lane on King Street, Merulla took note of his colleagues all saying they support transit improvements (despite voting against a transit improvement that literally cost the city nothing) and challenged them to address area rating for transit.

With this notice of motion, it looks like Merulla plans to make good on that challenge.

Here is the text of the motion:

Whereas transportation and public transit continue to be significant and important public policy matters; and

Whereas public transit (known as HSR) in the City of Hamilton remains a priority for Council; and

Whereas public transit ‎is currently apportioned to residents based on geographic area and service levels; and

Whereas Council has stated on numerous occasions, it supports a system wide approach to public transit which includes enhancing service levels;

Therefore let it be resolved:

That City staff report back as part of the 2016 Budget process the feasibility and impacts of adding HSR to the general levy; and

That this report align with the overall City Transit strategy.

Ryan McGreal, the editor of Raise the Hammer, lives in Hamilton with his family and works as a programmer, writer and consultant. Ryan volunteers with Hamilton Light Rail, a citizen group dedicated to bringing light rail transit to Hamilton. Ryan writes a city affairs column in Hamilton Magazine, and several of his articles have been published in the Hamilton Spectator. He also maintains a personal website and has been known to post passing thoughts on Twitter @RyanMcGreal. Recently, he took the plunge and finally joined Facebook.

16 Comments

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By Rolly (anonymous) | Posted January 28, 2015 at 17:53:47

Sam ROCKS!

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By LeeEdwardMcIlmoyle (registered) - website | Posted January 29, 2015 at 09:31:58

Thank you, Sam, and good luck. We'll need it.

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By Haveacow (registered) | Posted January 29, 2015 at 12:40:05

It will most likely fail, you are asking them to OK tax increases for their constituents after all. However, the comments from the councilors themselves regarding the motion at the actual council meeting will most likely become timeless classics! Those comments will not only show their true feelings regarding transit, they will feel so safe in the result that, they may let their guard down too! Yes, timeless classics that can be recorded and brought back when they run again in 2018! Even if they don't talk at all, their silence and actual vote will speak volumes for them. This should be fun!

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By Pxtl (registered) - website | Posted January 29, 2015 at 12:52:48 in reply to Comment 108540

Yeah, this is obviously a strategic move forcing the anti-transit rural councilors to face their hypocrisies.

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By J (registered) | Posted January 29, 2015 at 13:54:45 in reply to Comment 108541

while I fully support this from a policy perspective, this will alienate Brenda Johnson, whose constituents will seethe at the idea. Maybe instead of removing area rating the idea should be confined to the truly rural wards, 11, 12, 14 and 15?

On the other hand, thinking about it in context of the article by Ted Mitchell re perverse incentives, the problem is we have too much of a uniform and heavy handed system of DCs and property taxes. The reality should be a form of area rating that actually charges less dense areas more to reflect the higher costs of servicing. Same with DCs. Instead by pretending neutrality we do exactly the opposite and incentivize sprawl.

So really the issue is between practicality and policy. Merulla's motion isn't really great policy and will definitely start a war. So maybe the better solution from a revenue perspective is to start with DCs, which your average person could care less about, rather than a fruitless fight about area rating.

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By Ryan (registered) - website | Posted January 29, 2015 at 15:20:31 in reply to Comment 108545

The Citizens Forum on Area Rating came back to Council in early 2011 with their recommendation to end area rating [PDF] for transit: parts of the city within the urban boundary pay for transit, while parts of the city not within the urban boundary do not.

The Citizens’ Forum endorses the staff recommendation on Transit, which establishes one transit rate within the Transit Service Area (Urban) and continues not to charge properties outside the Transit Service Area (Rural).

That seems like an eminently reasonable compromise, and indeed it is a common practice in other municipalities. Hamilton is the only city in Ontario that area-rates transit.

The brand-new Council of 2011, presumably exhausted from selecting Ivor Wynne as the site of the new stadium, punted on area rating for transit while addressing area rating for fire and recreation services. Now, four years later, it would seem to be an excellent time for them to circle back and tie up this gigantic loose thread.

To put it bluntly, it is impossible to have a comprehensive city-wide transit strategy as long as various neighbourhoods continue to pay differential rates toward transit. As the Citizen Forum report put it:

There are implications for the recommendation for an area-rated urban transit model as the remnants of the pre-amalgamation borders are embedded in the current service delivery model and entrenched by the area rating taxation model. The current model does not recognize the urban transit area as one system (Waterdown excepted) that serves one economy, populated by certain workers who need reliable transit 7 days a week to get to work. Adoption of the recommendation would provide an opportunity to re-think the transit service delivery model.

So every councillor who expressed support for a comprehensive city-wide transit strategy - and that was pretty much all of them - must either support ending area rating for transit, or else explain why they don't support a comprehensive city-wide transit strategy after all.

And for heaven's sake, this is not a downtown-vs-suburbs thing, though it is certain that some people will twist themselves inside-out to frame it that way. Ending area rating for transit makes it possible to improve transit for people living in suburbs who need it. Again, the linked report:

An integrated transit system will remove some systemic barriers that affect the capacity of the transit service to meet the needs of the low-income workers who either live or work in the former suburbs.

While it may be the case that Councillors Whitehead and Collins refuse to rub shoulders with the people in their wards who use transit, such people certainly do exist. Further, there are many people who currently drive only because transit is not a viable alternative, but would rather not have to carry the expensive burden of multiple car ownership.

Running Hamilton's transit as a single global system within the urban boundary allows us to start thinking about setting common service level standards and redesigning the network around usability and reliability. But as long as funding and service levels remain structurally balkanized by legacy political boundaries, that exercise remains effectively impossible.

Comment edited by administrator Ryan on 2015-01-29 15:41:27

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By Bus Lane (anonymous) | Posted January 29, 2015 at 14:12:43

Hamilton is the only city with area rated services. That's bad policy. Merulla's motion is good policy and universally accepted except in Hamilton suburban areas.

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By jason (registered) | Posted January 29, 2015 at 19:59:32

I would prefer that rural areas be exempt from paying for transit/sewers, but also not be allowed a vote on such issues unless the vote pertains to extending service to their areas.

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By Nonsense. (anonymous) | Posted January 30, 2015 at 01:50:10 in reply to Comment 108554

Nonsense. More crackpot ideas. I wish we'd act like one city, regardless of the old town boundary. Your councillor's vote means just as much as mine. I don't use the concessions, but I don't mind my taxes paying to pave their roads or provide other services out there. I know, I know, you want each ward to become it's own fiefdom, and it's own mini-town, but it's not going to happen. Act like an adult and move on.

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By bikehounds (anonymous) | Posted January 29, 2015 at 23:24:51 in reply to Comment 108554

OK but what about snow removal and salt and repaving the huge expanses between houses? The system falls apart when you start building exclusions into it

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By jason (registered) | Posted January 30, 2015 at 20:37:11 in reply to Comment 108555

I'm thinking more along the lines of the Ottawa example mentioned below. But I would suggest rural wards not have a vote on transit issues.

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By DowntownInHamilton (registered) | Posted February 02, 2015 at 09:22:12 in reply to Comment 108610

So, applying that faulty logic, the city doesn't get a vote on rural issues?

Yes, that's very inclusive and a smart idea. Let's do that!

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By Pxtl (registered) - website | Posted February 02, 2015 at 12:25:21 in reply to Comment 108666

It would change nothing if we went that way. Urban councilors do not block the plans of rural councilors for their wards. That's the frustration. Suburban/rural motions are supported by the downtown, and the reverse does not happen.

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By What? (anonymous) | Posted January 30, 2015 at 09:50:43

Who said that?

You're right. Your comment is complete nonsense.

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By Haveacow (registered) | Posted January 30, 2015 at 09:55:55

When Ottawa amalgamated into a single tier municipality in 2000 (forced amalgamation between all 13 local governments and our regional government), we became like Hamilton, mostly rural, about 90% of the total territory of the city proper. Instead of a different rating for transit funding in each of the former lower tier municipalities, we have a area defined as an urban transit area or envelope. Everyone in the transit service area pays the same transit fee on their property taxes and the people who live outside pay a much smaller transit fee. The boundary is based on density not former political boundaries. The people inside the transit envelope get the full possible service O.C. Transpo can give them and the others who live outside the envelope get a system of morning and afternoon rural express services only, many operated by private contractors not O.C. Transpo. The fares of the rural express services are higher but they do get a direct trip downtown, with stops at key stations along the way. The private operators are also allowed to use the Transitway (marketing name of our busway system). Its not perfect and some do complain but, at least you get better service and much higher passenger numbers are the result.

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By J (registered) | Posted January 30, 2015 at 18:10:13 in reply to Comment 108571

this is what I was meandering to above. You essentially get a few zones, where we accept that in certain rural places (that are destined to remain so per Places to Grow) density will never be such to make transit viable. Ottawa also does area rated DCs, which make the most sense.

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